Operational challenges of strategy execution

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Abstract

Operations management studies the process of transforming material, labor, energy, or ideas into goods or services. Operations strategy outlines how firms leverage their capabilities to achieve competitive advantage. While developing or possessing these capabilities is paramount, they must be successfully leveraged to yield competitive advantage. This thesis comprises three essays which consider how firms can successfully implement their operations strategy, specifically within the context of supply chain management, remanufacturing, and project execution. The first essay (Chapter 2) empirically investigates the performance benefits of operational slack and operational scope in dynamic environments. We investigate how contingent investments in operational slack and operational scope moderate the relationship between unstable and unpredictable markets on firm performance. The second essay (Chapter 3) considers how a firm's organizational structure and incentives influence its decision to participate in remanufacturing. Through a principal-agent structure, we determine the optimal sales agent commission structures and product portfolio of new and remanufactured product for the firm. The third essay (Chapter 4) considers the challenges of executing strategic initiatives. We recognize the dual role of performance metrics, they communicate the target outcomes (i.e., what types of project outcomes are sought), and at the same time they incentivize the organizational impetus (i.e., effort commitment) from the stakeholders. Using a game theoretic model, we investigate the implications of the target outcome (focused or flexible definition of success) and project uncertainty, which are dependent on the organizational structure of the firm.